Big data, once relegated to the technology industry, is making its way toward financial institutions looking to make better decisions about consumer loans and credit opportunities.
The end result? Helping financial institutions around the world gather more data, analyze it more effectively, and make decisions more quickly.
Big Data, Big Changes
It’s been business as usual in the banking industry for almost 40 years.
The fundamental process of banking has remained the same despite rapid shifts in consumer technology because banks have continued to use the same formula to make decisions: gather as much data as possible, and ask a series of logical questions about it.
However, change doesn’t come when consumers have increased access to technology; change comes when financial institutions have increased access to consumer data. And that’s just what’s happening in the financial services industry as institutions get close to realizing the potential of big data.
The Future of Consumer Credit Scores
Big data has an infinite number of practical applications in the financial services industry, so it remains to be seen in which direction the industry will head.
In particular, data-mining efforts can be leveraged for the new generation of banking customers – a generation known for its social media activity and information, but not for its creditworthiness. This is leading some financial companies to consider using social media profile data to determine credit ratings.
Financial Loyalty Through Big Data
More banks are looking toward big data as a resource for increasing customer loyalty, as well. Financial institutions that can gather, analyze, and act on large amounts of customer feedback will be able to position themselves effectively to retain customer loyalty.
But the secret to powerful big data for financial institutions does not lie in asking the same questions of more and more data. Such practices simply reaffirm the data and provide data points for internal tracking.
The true value of big data lies in gathering large amounts of data and asking unique and different questions that can inform your decisions as a business. That’s where flexible big data analytics in financial services will earn its keep.
Next Steps:
- We invite you to watch our complimentary, on-demand webcast, “Retail Banking & Insurance: Customer Data Analysis.” In this webcast you will learn how leading financial institutions are using customer data to drive superior decisions, improve customer experience and make the most of their marketing budgets.
- Subscribe to our blog to stay up to date on the latest insights on how big data analytics can be used to make the world a better place.
